The Nifty concluded the week on January 20 at 21,572, reflecting a 1.47 percent dip from 21,894 levels. Despite persistent attempts to breach crucial resistance, each effort led to a sell-off, resulting in a consolidation trend within the 21,500-21,750 range, indicative of sideways movement. Weekly support remains robust at the 21,400 levels, while the upper Bollinger band presents resistance at 21,850.
In the previous week, the Bank Nifty experienced a notable 3.36 percent loss, closing at 46,058. The key technical indicator, the 20-day simple moving average (SMA), stands at 47,100, serving as a formidable resistance level. Additionally, the 200-day moving average (DMA) at 44,500 acts as critical support with a breach below these levels could intensify selling.
Noteworthy is the robust performance of the PSU Banking sector pack, which recorded a commendable 3.3 percent gain during the week. This surge played a pivotal role in bolstering bullish sentiment across banking stocks.
Pre-budget sentiment might lead to more volatility this week, as there are just three trading sessions and all eyes are on Bank Nifty, which is in oversold territory. There's an anticipation of a potential rebound from lower levels, especially within the private banking stocks.
Here are three buy calls for short term:
GAIL India: Buy | LTP: Rs 166.5 | Stop-Loss: Rs 158 | Target: Rs 180 | Return: 8 percent
The GAIL India has recently experienced a significant breakthrough, marking a horizontal trendline breakout on the daily scale. This breakout was not only notable for its technical significance but was also accompanied by a remarkable surge in trading volume, surpassing three times the 50-day average volume.
Adding to the bullish sentiment, the stock displayed a substantial bullish candle on the breakout day, further reinforcing the strength of this upward movement.
The stock is currently trading at an all-time high level, supported by a convergence of positive signals from various technical indicators. All moving averages and momentum indicators are aligning to suggest a strong bullish momentum in the stock.
Both the daily and weekly relative strength index (RSI) is firmly situated in a higher zone indicating stock may zoom higher from the current levels. The MACD histogram is signalling a pickup in upside momentum, adds yet another layer of confirmation to the positive outlook.
Hence, based on the above technical structure, one can initiate a long position at CMP Rs 166.5 for a target price of Rs 180. The stop-loss can be kept at Rs 158.
Indian Hotels Company: Buy | LTP: Rs 479 | Stop-Loss: Rs 460 | Target: Rs 522 | Return: 9 percent
The Indian Hotels Company is currently trading at Rs 479, demonstrating a consistent upward trend within a positive rising channel. This bullish movement is further supported by its short-term moving averages of 20 and 50 indicating a favourable short-term momentum.
Additionally, weekly RSI stands at 74 and is trending upward suggesting increased buying participation and positive investor sentiment. Furthermore, the stock has recently surpassed a significant trendline resistance which had been acting as a formidable supply zone. This breakout is a strong indication of a potential upward surge in the stock price.
Hence, based on the above technical structure, one can initiate a long position at CMP Rs 479 for a target price of Rs 522. The stop-loss can be kept at Rs 460.
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